Coke products may look a little different next year

New York
CNN business

Over the past year, Coca-Cola has experimented with quirky limited-time flavors and immersive online experiences. Now, it’s focusing on adding more varieties of cans, bottles and value packs to give cash-strapped consumers more options, even if that means ultimately paying less.

“Package innovation is taking on a bigger role” when shoppers are concerned about spending, CEO James Quincey said Tuesday on an analyst call to discuss third-quarter results. “We will approach the 23rd with a broad innovation agenda, but with some weight on the boat.”

For companies like Coke, offering more types of packaging, especially smaller ones, is a way to retain or attract cost-conscious customers even as prices continue to rise.

“It’s about expanding the price ladder,” Quincey said, “making sure that the entry price … becomes as low as possible on the price spectrum, in the real pocket.”

That’s especially important now that Coca-Cola has seen consumers start to tighten their belts as prices have risen.

Some shoppers are starting to spend less at the grocery store. “Because of that, the price becomes even more important than the price per gallon,” Quincey said. “That’s absolutely what we’re looking for.”

In other words, while customers may end up paying more per liter when they buy small packages, some are willing to trade that for a lower price because they can’t afford the higher priced product.

Coca-Cola ( KO ) already sells multipacks with smaller containers and fewer cans. In the third quarter, the company introduced a value collection that offers customers products of different sizes. Those items, available in select U.S. stores, “help retain and recruit more consumers while creating value for our customers,” Quincey said.

The CEO also noted that returnable packaging is another way to reduce costs, as consumers get a refund for returned bottles and cans.

Earlier this year, the company announced a goal to sell at least a quarter of all its drinks worldwide in refillable or returnable containers by 2030. (Coca-Cola also recently announced a change in the look of its Sprite bottles, ditching its signature green). clean plastic, which is more easily recycled).

These strategies can help offset the impact of higher prices on consumers. The company expects inflation and volatility in the commodity market to affect its costs, and prices may continue to rise.

“It will be above normal input costs,” Quincey he said on CNBC’s Squawk on the Street. “So we expect prices to be ahead of normal next year on top of what happened this year.”

The company is also looking at other changes, including adding “more premium options for those who still have a lot of income,” Quincey said on the analyst call.

And it plans to continue promoting Coke Zero Sugar, the growth engine, with more marketing and other innovations.

So far, Coca-Cola’s pricing and innovation strategy seems to be working. In the third quarter, the company’s net income rose 10% to $1.1 billion.